Bitcoin Millionaires Are Flocking To This North American Tax Haven. But What Do The Locals Think?

Bitcoin has made its own fair share of millionaires and with the recent bull rally, there is no doubt that this number went up drastically. This has led to a number of issues of investors who have made their money off the digital asset, the main one being taxes. A lot of these millionaires have begun to flee to places with less strict tax laws, as well as better weather conditions.

Bitcoin Millionaires Flock To Puerto Rico

A recent report from CNBC documents the movements of bitcoin millionaires towards Puerto Rico and its beautiful islands. The subject of the report, 36-year-old crypto entrepreneur and investor David Johnson, outlines why he moved himself and his entire family to the North American country. For the entrepreneur, the tropical paradise was a big push, as well as the tax breaks offered to those who spend at least 183 days on the island.

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Johnson also noted that the decision to move was also predicated on the fact that his friends had all moved to the same destination. The 36-year-old who lived in New York before the move said there weren’t any of his friends left in what is said to be one of the most expensive cities in the world as they had all moved to Puerto Rico.

“That’s where all my friends are. I don’t have one friend left in New York, and maybe the pandemic accelerated this, but every single one of them has moved to Puerto Rico,” Johnson told CNBC.

In addition to offering tax breaks to those who spend a significant amount on the island, residents are also allowed to retain their American passports.

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Locals Not Feeling The Love

Puerto Rican locals are not exactly happy about seeing the move to the tropical paradise. This has less to do with the people coming in and more to do with the fact that the locals themselves do not qualify for the tax exemptions that these non-Puerto Ricans enjoy.

Residents like Johnson who move in from other American states after making their millions with bitcoin and crypto do not have to pay capital gains on their earnings. However, Puerto Rican citizens are having to pay up to 15% long-term capital gains tax.

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This disparity between locals and non-locals has obviously now been the source of tension between the two groups. These tax breaks which were meant to bring more jobs and investors into the region are now being utilized by residents who are trying to get out of paying capital gains tax.

Additionally, the influx of new wealthy residents is causing property costs to surge. Diaz Fournier of Luxury Collection Real Estate told CNBC that the increased demand has led to prices not seen before. “I’ve been tracking the markets for several years, and I was not expecting this,” Fournier said. “You have properties in Dorado Beach that have been sold for more than $20 million.”

Bitcoin price chart from

BTC falls to $41K | Source: BTCUSD on
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74% Of Bitcoin Holders Remain In Profit At Current Prices

Bitcoin price has dropped quite a bit from its $69,000 all-time high but it continues to maintain high values. Investors who have been in the market for a while are deep in profit, while a small minority are the only ones in loss. Nevertheless, it goes to show how much the digital asset has grown in value given that the large majority of investors could sell now and still make a profit.

74% Of Bitcoin Holders Remain In Profit

Data from IntoTheBlock shows that a total of 74% of all bitcoin holders continue to remain in profit. These investors would make a profit and some already have been realizing this profit with the sell-offs that have been taking place in the market. So despite declining prices for the past month, the majority of bitcoin investors are realizing gains from their investments.

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On the flip side of this, a total of 18% of investors are in loss from their investments. Going with current prices, these investors would have purchased their bitcoins at about $52,000 and higher, putting them right in loss territory. The rest of the investors, 7% in total, remain in neutral territory. These are the investors who bought their bitcoins on or around the current trending price of the digital asset.

Majority of bitcoin investors remain in profit

74% of BTC investors are in profit | Source: IntoTheBlock

Of all of thee investors, 56% have held their bitcoins for longer than a year, putting the majority of those who have held their bitcoins for longer right in profit territory. A total of 33% have held their assets for a duration of 1 to 12 months, while 11% have held their coins for less than a year.

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It’s safe to say that most of those in loss are those in this last category as they would have bought their bitcoins at the height of the bull rally that sent the digital asset to new all-time highs.

Exchange Outflows Signaling Supply Squeeze

Even as the majority of bitcoin holders are in profit, exchange inflows continue to underperform outflows. On a seven-day moving average scale, total outflows from exchanges have been higher than inflows by almost $1 billion.

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The total bitcoin exchange inflows for the last seven days came out to $7.54 billion, while outflows for the same time period were higher at $8.27 billion. This signals an impending supply squeeze as the coins moving out of exchanges are higher than those coming in.

Additionally, this points to bullish sentiment among investors. With more coins moving out of exchanges, investors are most likely consolidating their holdings and moving them to safer self-storage options to hold out for the long-term.

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BTC breaks above $50,000 | Source: BTCUSD on
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Majority Of Bitcoin Investors Got In This Year, Says Grayscale

If there is one thing bitcoin bull markets are good for, it’s drawing investors into the market. This has been the case for all of the past bull rallies and the 2021 rally was no different. The number of investors who bought their first BTC this year has been significant, soaring higher than the number of investors that were already invested in the cryptocurrency.

Grayscale LLC carried out a survey that showed that 2021 has been a remarkable year for new bitcoin investors who flocked to the market en masse. The multiple bull runs this year brought with it heightened interest from both individual and institutional investors and that fact shone through in the data collected by Grayscale.

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55% Of Investors Got In This Year

Grayscale LLC carried out a survey that consisted of 1,000 respondents and the results have shown some interesting trends. According to the survey carried out in mid-August, a larger percentage of all investors in bitcoin only started investing this year.

Of the 1,000 respondents, a quarter (25%) said that they already bought and owned BTC but more interesting was the fact that 55% of all respondents who owned BTC said that they started investing in the digital asset this year.

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BTC starts another recovery trend | Source: BTCUSD on

This follows the growth trend of the digital asset and other cryptocurrencies as investors placed their stakes in various assets. Another space that has benefitted from the increased interest has been the DeFi space, which has grown exponentially in the space of one year.

Investors Cannot Ignore Bitcoin

Bitcoin is more or less already mainstream and the responses to the survey showed that this is the case. Investors, no matter what their preferred method of investment is, can no longer ignore bitcoin, or even the promise that the digital assets holds going forward. Grayscale noted this fact in the survey report as it stated that “it is becoming increasingly difficult for investors to ignore bitcoin as its price continues to rise.”

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About 80% of the respondents also answered that they were likely to invest in bitcoin through an exchange-traded fund, indicating that even those who are yet to invest in BTC have the asset on their radar. However, this is impossible right now as the SEC is yet to approve any bitcoin exchange-traded funds.

Other interesting findings from the survey were that more investors (60%) were willing to purchase BTC through an app. In contrast to this, over 75% of polled respondents in 2020 had revealed that they would rather purchase their bitcoin through an exchange.

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Bitcoin Inflows Shows Institutional Investors Are Back On The Bull Train

Bitcoin recovered above $50K on Tuesday following a rallying that pulled the market back into the green. October has so far been good for the digital asset and investors have begun to return again into the market amid recovering prices. On the investment front, inflows show that institutional interest in bitcoin is returning after inflows had fallen short of expectations in the previous weeks.

Bitcoin Makes Up 76.6% Of Weekly Inflows

A report published by CoinShares shows that bitcoin inflows had picked back up. Altcoins had been taking more market share as their popularity grew due to the rise of decentralized finance (DeFi) networks like Ethereum and Solana. These assets had dominated market inflows as investors had flocked to profit from their growth. Altcoins had seen the largest shares of market inflows throughout the month of September. But the close of the month had shown a decisive turn in institutional investors’ sentiments.

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The report showed that institutional inflows were $90 million for the previous week, and bitcoin alone had seen inflows of $69 million. This accounted for 76.6% of the total inflows, showing that institutional investors are not turning their attention back to bitcoin. The highly appreciative asset has a proven track record of long-term success and its recent turn in prices has been evidence of that.

Investors’ confidence in BTC is on the mend. The Fear & Greed Index moved into greed, showing mounting buying pressure on the market. Bitcoin and its related products are seeing increased interest from investors, and most importantly, big money is moving back into the asset.

Bitcoin price chart from

Bitcoin price chart from

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BTC breaks $52K resistance point | Source: BTCUSD on

Market Inflows Pick Up As Altcoins Concede

Inflows in the market have picked up in recent weeks. This marks the 7th consecutive week of inflows and a total of $411 million has moved into the market. Altcoins have given up some of the market shares which they had pinched from the top cryptocurrency. Ethereum inflows for the week had totaled $20 million, down 3% from its peak to only 25% of total inflows.

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Solana which had dominated inflows for a while in September had recorded a significant drop in inflows. The asset recorded only minor inflows of $0.7 million. Alongside other altcoins which had suffered the same fate. Cardano, the third-largest cryptocurrency by market cap, only saw inflows totaling $1.1 million. While Polkadot, Tezos, and Binance each recorded inflows totaling $0.8 million.

Volumes have however remained low despite inflows. At the height of the bull market in May, volumes had reached $8.4 billion. Now, volumes are at a low of $2.4 billion, representing an over 70% drop from their peak in May.

Featured image from Coinnounce, chart from


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Bitcoin (BTC) $ 41,415.10 4.97%
Ethereum (ETH) $ 2,244.54 3.82%
Litecoin (LTC) $ 74.17 3.26%
Bitcoin Cash (BCH) $ 251.66 9.36%